Brooklyn, NY · Member since 2016 · 15 posts · 5 votes
Hello community,
I am new to BP and very new to real estate investing. I have been looking into purchasing tax liens for sometime now but I never took that first step yet.
I think I fairly understand the process. Counties auction tax liens to the public. After purchasing a tax lien, there is a redemption period(dependent on the state) for when the property owner can pay their unpaid taxes. If the owner pays the taxes within the redemption period, the tax lien holder will receive the amount they purchased for the lien plus interest.
My question is, what happens when the property owner does not pay the taxes within the redemption period. Also is there any kind of deal I could make with the property owner before the auction?
Real Estate Investor · Seattle, WA · Member since 2015 · 14 posts · 5 votes
10y
Hello Cazemba
If the property owner does not pay the taxes within the redemption period then you can legally foreclose and force the property to go to a tax deed sale. No there isn't a deal you could make with the property owner because you don't know beforehand who will be the new owner of the property because the property will go to auction. You are not required to foreclose on the property however the next year(or same year with more than one lien for that year) another lien holder will be able to foreclose on the same property. Which state are you specifically looking to buy liens in?
Brooklyn, NY · Member since 2016 · 15 posts · 5 votes
10y
Just to confirm what you are saying @Les Jean-Pierre. The NYC tax lien auction is not open to the public? If I can't purchase tax liens at the auction where can I purchase it?
Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
10y
Two servicers buy the liens. They then have to initiate a foreclosure. You can buy at the auction. So, for the liens going on soon, don't expect them to be foreclosed for a few years given the backload in the NY courts. Go to the DOF website and it explains most of it.
Attorney · Chicago, IL · Member since 2015 · 142 posts · 79 votes
10y
The legal process differs state to state. In IL, when the redemption period expires you (the tax buyer) have the right to obtain a tax deed assuming you have strictly complied with the IL Property Tax Code. There are potential deals you can make with the owner or third parties, but it depends on the type of tax sale. If you want more information re: IL tax sales, send me a PM. Thx.
Wholesaler · Lehi, UT · Member since 2015 · 333 posts · 144 votes
10y
@Cazemba- After talking to the Schenectady Tax Atty in New York I was informed that New York does not sell tax liens per state statute anymore. There are some places that sell over the counter tax deeds from what I have found. Here is one of the online sites to purchase and you may find your county of interest here:
You can also go to the county and then to the finance department or real estate department and see what is on the site. We have many listings on our site. It's a great state but lots of different rules to learn. You will be purchasing the deed and if you are participating in an auction then you will be the highest bidder to be the winning bidder. Set your ceiling and if you like what you see go for it. One thing to remember about the auctions is that it's easy to get emotionally involved. That's why an online auction can be a good thing if you are able to participate because you don't have the heat of the auction with others around you at the time.